Squeezing margins: reducing costs while balancing risks [electricity markets]

Liberalising the energy market increased the awareness of transmission and distribution companies for optimising network activities and reducing costs. Network operators have to balance between performance, risks and costs. The traditional approach leads to sub-optimisation. When planning, adapting or operating existing power supply systems one can save by using the system and its components closer to their limits. Increased use of margins means: taking more risks. This paper handles topics like types of risks, tools and methods and the decision-making process. Using practical cases, the paper demonstrates how investments, reliability and technical constraints can be handled jointly in one integral decision process. The examples prove that by doing so savings can be realised.